FIRST PACIFIC COMPANY LIMITED 第一太平有限公司 Press Release

Tuesday, 5 March 2013

PLDT 2012 CONSOLIDATED CORE NET INCOME AT P37.3 BILLION ; REPORTED NET INCOME AT P35.5 BILLION, 12% HIGHER ; FINAL AND SPECIAL DIVIDENDS TOTALING P112/SHARE DECLARED,BRINGING DIVIDEND PAYOUT TO 100% OF CORE INCOME FOR 6TH STRAIGHT YEAR;

CONSOLIDATED SERVICE REVENUES UP 10% TO P169.3 BILLION; COMBINED CELLULAR SUBSCRIBER BASE AT 69.9 MILLION,UP 10% FROM YE2011 – OVER 72.5 MILLION END FEBRUARY 2013; TOTAL BROADBAND SUBSCRIBERS AT 3.3 MILLION, 11% HIGHER; TWO-YEAR P67 BILLION NETWORK TRANSFORMATION COMPLETED; 2013 FORECAST CAPEX OF P29.0 BILLION, LOWER BY P7.4 BILLION FROM P36.4 BILLION IN 2012

The attached press release was distributed today in Manila by Philippine Long Distance Telephone Company (“PLDT”), in which First Pacific Group holds an economic interest of approximately 25.6%

PLDT (PSE: TEL; NYSE: PHI) is the leading telecommunications service provider and has the largest market capitalization in the Philippines. Its shares are listed on the Philippine Stock Exchange and its American Depositary Receipts are listed on the New York Stock Exchange. Through its three principal business groups, PLDT offers a wide range of telecommunications services: Wireless (principally through subsidiary companies, Smart Communications, Inc. and Digital Telecommunications Philippines, Inc.(“Digitel”)); fixed line (principally through PLDT); and business process outsourcing (through SPi Global Holdings, Inc.). PLDT has developed the Philippines’ most extensive fiber optic backbone, and cellular and fixed line networks.

Further information on PLDT can be found at www.pldt.com

* * * For further information, please contact: John Ryan Tel: (852) 2842 4355 Executive Vice President Mobile: (852) 6336 1411 Group Corporate Communications

Sara Cheung Tel: (852) 2842 4336 Vice President Group Corporate Communications

pressrelease

2012 CONSOLIDATED CORE NET INCOME AT P37.3 BILLION REPORTED NET INCOME AT P35.5 BILLION, 12% HIGHER FINAL AND SPECIAL DIVIDENDS TOTALING P112/SHARE DECLARED, BRINGING DIVIDEND PAYOUT TO 100% OF CORE INCOME FOR 6TH STRAIGHT YEAR

CONSOLIDATED SERVICE REVENUES UP 10% TO P169.3 BILLION COMBINED CELLULAR SUBSCRIBER BASE AT 69.9 MILLION, UP 10% FROM YE2011 – OVER 72.5 MILLION END FEBRUARY 2013 TOTAL BROADBAND SUBSCRIBERS AT 3.3 MILLION, 11% HIGHER TWO-YEAR P67 BILLION NETWORK TRANSFORMATION COMPLETED 2013 FORECAST CAPEX OF P29.0 BILLION, LOWER BY P7.4 BILLION FROM P36.4 BILLION IN 2012

• Consolidated Reported Net Income for 2012 at P35.5 billion, 12% higher from P31.7 billion in 2011 • Consolidated Core Net Income of P37.3 billion for 2012 • Final and special dividends of P60 and P52, respectively, per share declared; total dividend payout for 2012 equivalent to 100% of Core Net Income • Consolidated service revenues up 10% year-on-year to P169.3 billion • Consolidated EBITDA margin at 46% of service revenues; consolidated EBITDA down 3% to P77.3 billion • Consolidated free cash flow at P37.8 billion for 2012 • Cellular subscriber base at 69.9 million, net additions of 6.2 million for the year • Total broadband subscribers at 3.3 million; aggregate revenue contribution from broadband and internet services of P23.7 billion for 2012, 26% higher than last year • Two-year P67 billion network transformation completed • 2013 forecast capex of P29.0 billion, lower by P7.4 billion from P36.4 billion in 2012

MANILA, Philippines, 5th March 2013 –– Philippine Long Distance Telephone Company (“PLDT”) (PSE: TEL) (NYSE: PHI) today announced its audited financial and operating results for 2012 with Reported Net Income, after reflecting exceptional transactions for the period, rose 12% to P35.5 billion, from P31.7 billion in 2011. These results reflect the consolidation of the operating performance of Digital Telecommunications Philippines, Inc. (“Digitel”) from its acquisition on 26th October 2011.

Consolidated Core Net Income, before exceptional items, amounted to P37.3 billion. While the full year Core Net Income was 4% lower than the P39 billion recorded in 2011, the second semester core profit of P18.7 billion was flat to the first semester and improved 4% over the second semester of 2011, when much of the decline was incurred. Despite higher service revenues, Core Net Income declined as a result of higher operating expenses relating mainly to the manpower reduction programs at PLDT, Smart and Digitel and selling and promotions initiatives.

Reported Net Income was impacted by the decline in Core Net Income, higher net foreign exchange and derivative gains and lower asset impairment charges.

Page 1 of 9

EBITDA margin for 2012 dipped to 46%, from 52% in 2011, partly reflecting Digitel’s lower margins in addition to the manpower right-sizing expenses and higher selling and promotion expenses. Consolidated EBITDA for 2012 was lower by 3% at P77.3 billion compared with P80.0 billion in 2011. Without the P3.8 billion charge relating to the manpower right-sizing programs, EBITDA would have been P81.1 billion, or P1.1 billion higher than 2011, and EBITDA margin would have been 48%.

Overall consolidated service revenues for 2012 increased by 10% to P169.3 billion, reflecting the combined effect of a 15% increase in wireless revenues, 4% increase in fixed line revenues, and a 15% rise in BPO revenues.

Earlier today, the Company’s Board of Directors declared a final dividend of P60 per share as well as a special dividend of P52 per share. This brings the 2012 total dividend payout to P172 per share, equivalent to 100% of Core Income.“This is the sixth straight year that we have paid out 100% of our core earnings. Despite increased capex levels, we have continued to generate strong free cash flows and sustained our commitment to our shareholders,” stated Manuel V. Pangilinan, PLDT Chairman.

“Our financials for 2012 reflect full year results of Digitel for the first time, as well as our successful navigation of the various challenges we faced during the year – the intense competition in the wireless space, the integration of Digitel and Sun operations into the group, the continued push for the growth of broadband, the completion of our network transformation, the rationalization of our business portfolio leading to the sale of our BPO businesses, and the beginning of our involvement in the media space,” remarked Napoleon L. Nazareno, President and CEO of PLDT and Smart.

Consolidated free cash flow reached P37.8 billion, or P9.4 billion lower compared with 2011. Consolidated capital expenditures for 2012 amounted to P36.4 billion as the PLDT Group completed its two-year network transformation program ahead of schedule. Capital expenditures are expected to return to below 20% of revenues beginning in 2013. The Group’s super-charged network, unrivalled in terms of coverage, capacity and resiliency, now encompasses:

• 3G population coverage of 71% • 1,000 operational LTE sites with contiguous coverage in major CBDs as well as all of Metro Manila and other major cities • 54,000 kilometers of fiber assets in place, and 14,000 kilometers of fiber-to-the home rolled out • Fiber and IP-readiness for close to 100% of Metro Manila sites • Four international cable landing stations • Double internet gateway capacity

The Group’s consolidated net debt stood at US$1.9 billion as at 31st December 2012. Gross debt amounted to US$2.9 billion, with the inclusion of Digitel’s debt amounting to US$0.5 billion. Net debt to EBITDA was at 1.0x. The Company’s debt maturities continue to be well spread out, with over 70% due in and after 2015. The percentage of US dollar-denominated debt to the Group’s total debt portfolio is at 46%. Taking into account our peso borrowings, our hedges and our U. S. Dollar cash holdings, only 34% of total debt remains unhedged. The Group’s cash and short-term securities are invested primarily in bank placements and Government securities. PLDT is the first Philippine company to be rated “investment grade” by all three major international ratings agencies.

Page 2 of 9

Subscriber Base

The PLDT Group’s total cellular subscriber base as at 31st December 2012 was 69.9 million subscribers, broken down as follows: Wireless subsidiary Smart Communications, Inc (“Smart”) had 25.5 million subscribers under its mainstream Smart brands, while value brand Talk ‘N Text ended with 28.4 million subscribers as a result of 8.0 million net additions for the year. Digitel had 15.7 million Sun Cellular subscribers. The Group’s combined postpaid cellular subscriber base, inclusive of Sun Cellular’s 1.6 million postpaid customer count, soared to 2.3 million at the end of 2012, the highest in the industry. Smart’s postpaid additions of 133,000 for the year are an all-time high. As of February 2013, our cellular subscriber base rose to over 72.5 million.

On the other hand, the Group’s combined broadband subscriber base hit 3.3 million at the end of 2012, double that of competition, and representing net additions of about 335,000 for the PLDT Group’s various broadband services. SmartBro, Smart’s wireless broadband service offered through its wholly-owned subsidiary Smart Broadband, Inc., had a wireless broadband subscriber base of about 1.73 million at the end of the period, over 1.2 million of whom were on SmartBro’s prepaid service. Meanwhile, PLDT’s DSL subscribers increased by over 68,000 for 2012, bringing the total subscriber base to 829,000, while Digitel had a total of 75,000 DSL subscribers.

For the fixed line businesses of both PLDT and Digitel, the subscriber base totaled 2.1 million at the end of 2012, nearly three times that of competition.

Service Revenues

Smart/Sun continues to lead the industry in terms of both revenues and subscribers. With the addition of Sun Cellular, wireless service revenues increased by 15% to P117.4 billion for 2012, compared with the P102.1 billion recognized last year.

Total broadband and internet revenues for 2012 totaled P23.7 billion, a 26% growth rate year- on-year; broadband and internet now account for 13% of total group service revenues. Smart wireless broadband revenues, exclusive of mobile internet revenues, increased by 4% to P6.7 billion, compared with the P6.5 billion recorded last year. Moreover, mobile internet usage continues to grow strongly, with Smart’s mobile internet revenues increasing by 56%, from P1.6 billion at the end of 2011 to P2.6 billion at the end of 2012, and Sun Broadband revenues of P0.6 billion. PLDT DSL generated P10.6 billion in revenues for 2012, up 12% from P9.5 billion in 2011.

“With our network now super-charged, we have proceeded to the next phase of enhancing quality of service. With four times more fiber assets than the competition, we are more than ready to take on the data explosion, especially as we expect the advent of smartphones in the US$50 range in the near future,” said Orlando B. Vea, Smart Chief Wireless Adviser.

Fixed line service revenues increased by P2.5 billion or 4% to P61.3 billion in 2012 from P58.8 billion in 2011. Digitel contributed P3.3 billion to total fixed line revenues. PLDT enterprise data and DSL revenues continued on their growth path on the back of a 12% increase in DSL revenues and a 2% increase in third party corporate data revenues. On the other hand, the ILD and NLD businesses of PLDT posted a 10% decline in revenues.

"We are excited to see the market accepting the new services on the Fixed Line side, both for Home and Enterprise," declared Napoleon L. Nazareno.

Page 3 of 9

The Group’s BPO operations were consolidated in 2011 under SPi Global Holdings, Inc (“SPi”). Last February 2013, it was announced that PLDT had agreed to sell the SPi businesses to Asia Outsourcing Gamma Ltd (“AOG”), a company controlled by CVC Capital Partners. PLDT also announced its intention to take a 20% stake in AOG. The transactions are expected to conclude early April 2013. SPi generated revenues of P9.9 billion in 2012, an increase of 15% over the previous year.

Investment in PDRs of MediaQuest

Last May 2012, PLDT announced the financial investment of P6 billion by ePLDT, a wholly- owned PLDT subsidiary, in Philippine Depositary Receipts (PDRs) to be issued by MediaQuest Holdings, Inc. MediaQuest is a wholly-owned entity of the PLDT Beneficial Trust Fund, and has investments in media assets that include TV5 and CignalTV, among others. The P6 billion has been advanced as deposit on future PDR subscription.

The PLDT Board has confirmed that the P6 billion investment in MediaQuest PDRs will give PLDT a 40% economic interest in MediaScape, the wholly owned subsidiary of MediaQuest that operates a direct-to-home (DTH) pay-TV business under the brand name CignalTV.

Investments in MediaScape will be equity accounted in ePLDT’s financials as soon as the PDRs are issued.

Earlier today, the PLDT Board approved additional investments by ePLDT:

• P3.6 billion for 40% economic interest in SatVentures, which in turn holds the residual 60% economic interest in MediaScape. • P1.95 billion for 100% economic interest in Hastings Holdings, which holds print-related investments including minority positions in the Philippine Star, the Philippine Daily Inquirer, and BusinessWorld

These investments are consistent with the overall strategy of broadening the PLDT Group’s distribution platforms and increasing PLDT’s ability to deliver multi-media content to its customers across the group’s broadband and mobile networks.

Conclusion

“We are happy to note our improved performance in the second half of 2012, which was 4% higher than the second half of 2011. Even more encouraging was our fourth quarter profit of P9.3 billion, 10% higher than the fourth quarter of 2011. Both indicators would have shown increases relative to the first half and third quarter of 2012, respectively, if not for the various manpower reduction programs which reduced fourth quarter profits by P2 billion. While I believe the bottom is likely to be behind us and we have successfully defended our market share in the last few quarters, much still has to be done. Accordingly, we are guiding our Core Net Profit towards P38.3 billion in 2013, a gain of about P1 billion over 2012, an improvement after two years of decline. Capital expenditures are expected to reduce from 2012 by P7.4 billion to P29 billion with the successful completion of our network transformation program,” concluded Manuel V. Pangilinan.

####

Page 4 of 9

PLDT Consolidated

Year ended December 31 Three months ended December 31

2012 2011 % Change 2012 2011 % Change (Audited) (Audited)

(a) Service revenues 169,331 153,958 10% 43,087 41,690 3%

Total revenues 172,626 156,603 10% 44,069 42,554 4%

Expenses 132,185 113,382 17% 37,744 40,014 -6%

Income before income tax 43,841 42,677 3% 6,519 2,351 177%

Provision for income tax 8,440 11,040 -24% (193) 1,321 -115%

Net income - As Reported 35,454 31,697 12% 6,740 1,079 525% Continued Operations 34,794 30,866 13% 6,531 904 622% Discontinued Operations 660 831 -21% 209 175 19%

(b) Core net income 37,333 39,035 -4% 9,313 8,433 10% Continued Operations 36,665 38,282 -4% 9,091 8,248 10% Discontinued Operations 668 753 -11% 222 185 20%

EPS (based on Reported Net Income) Basic 163.86 163.24 - 31.13 1.13 2655% Diluted 163.86 163.10 - 31.13 1.04 2893%

EPS (based on Core Net Income) Basic 172.56 201.58 -14% 43.04 39.56 9% Diluted 172.56 201.41 -14% 43.04 39.43 9%

(a) 2011 Service Revenues restated to reflect the change in the presentation of outbound revenues (b) Net income as adjusted for the net effect of gain/loss on FX and derivative transactions, additional depreciation charges and recognition of deferred tax assets

Page 5 of 9

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at December 31, 2012 and 2011 (in million pesos, except par value per share amounts and number of shares)

2012 2011 (As Adjusted*) ASSETS Noncurrent Assets Property, plant and equipment 200,078 200,142 Investments in associates and joint ventures and deposit 27,077 17,865 Available-for-sale financial investments 5,651 7,181 Investment in debt securities and other long-term investments – net of current portion 205 150 Investment properties 712 1,115 Goodwill and intangible assets 74,250 83,303 Deferred income tax assets – net 5,483 5,975 Prepayments – net of current portion 10,893 8,869 Advances and other noncurrent assets – net of current portion 1,376 1,340 Total Noncurrent Assets 325,725 325,940 Current Assets Cash and cash equivalents 37,161 46,057 Short-term investments 574 558 Trade and other receivables 16,379 16,245 Inventories and supplies 3,467 3,827 Derivative financial assets – 366 Current portion of investment in debt securities and other long-term investments 150 358 Current portion of prepayments 5,144 6,345 Current portion of advances and other noncurrent assets 8,116 126 70,991 73,882 Assets classified as held-for-sale 13,752 – Total Current Assets 84,743 73,882 TOTAL ASSETS 410,468 399,822

EQUITY AND LIABILITIES Equity Non-voting serial preferred stock, Php10 par value per share, authorized - 807,500,000 shares; issued and outstanding - 36,002,970 shares as at December 31, 2012 and 441,912,370 shares as at December 31, 2011 360 4,419 Voting preferred stock, Php1 par value per share, authorized, issued and outstanding - 150,000,000 shares as at December 31, 2012 150 – Common stock, Php5 par value per share, authorized - 234,000,000 shares; issued - 218,779,886 shares and outstanding - 216,055,775 shares as at December 31, 2012; and issued - 217,160,444 shares and outstanding - 214,436,333 shares as at December 31, 2011 1,093 1,085 Treasury stock - 2,724,111 shares as at December 31, 2012 and 2011 (6,505) (6,505) Capital in excess of par value 130,566 127,246 Retained earnings 24,794 26,232 Other comprehensive income 790 (644) Reserves of a disposal group classified as held-for-sale (2,188) – Total Equity Attributable to Equity Holders of PLDT 149,060 151,833 Noncontrolling interests 182 386 TOTAL EQUITY 149,242 152,219

* Certain amounts shown here do not correspond to the 2011 consolidated financial statements and reflect adjustments made as detailed in Note 13 – Business Combinations and Acquisition of Noncontrolling Interests – PLDT’s Acquisition of Digitel.

Page 6 of 9

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued) As at December 31, 2012 and 2011 (in million pesos)

2012 2011 (As Adjusted *) Noncurrent Liabilities Interest-bearing financial liabilities – net of current portion 102,821 91,280 Deferred income tax liabilities – net 5,713 7,078 Derivative financial liabilities 2,802 2,235 Customers’ deposits 2,529 2,272 Pension and other employee benefits 1,822 609 Deferred credits and other noncurrent liabilities 21,950 22,642 Total Noncurrent Liabilities 137,637 126,116 Current Liabilities Accounts payable 30,451 29,554 Accrued expenses and other current liabilities 72,911 58,271 Current portion of interest-bearing financial liabilities 12,989 26,009 Provision for claims and assessments 1,555 1,555 Dividends payable 827 2,583 Derivative financial liabilities 418 924 Income tax payable 1,809 2,591 120,960 121,487 Liabilities directly associated with assets classified as held-for-sale 2,629 – Total Current Liabilities 123,589 121,487 TOTAL LIABILITIES 261,226 247,603 TOTAL EQUITY AND LIABILITIES 410,468 399,822

* Certain amounts shown here do not correspond to the 2011 consolidated financial statements and reflect adjustments made as detailed in Note 13 – Business Combinations and Acquisition of Noncontrolling Interests – PLDT’s Acquisition of Digitel. See accompanying Notes to Consolidated Financial Statements.

Page 7 of 9

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS For the Years Ended December 31, 2012, 2011 and 2010 (in million pesos, except earnings per common share amounts)

2012 2011 2010 (As Adjusted *) REVENUES Service revenues 160,189 145,834 148,597 Non-service revenues 3,295 2,645 2,217 163,484 148,479 150,814 EXPENSES Depreciation and amortization 32,354 27,539 25,881 Compensation and employee benefits 23,042 15,089 19,148 Repairs and maintenance 12,604 10,053 9,087 Interconnection costs 11,556 12,586 13,928 Selling and promotions 9,708 7,807 5,244 Cost of sales 8,747 5,443 4,771 Rent 5,860 3,938 3,699 Professional and other contracted services 5,361 5,143 4,462 Asset impairment 5,286 10,200 1,420 Taxes and licenses 3,506 3,554 2,508 Communication, training and travel 2,042 1,645 1,535 Insurance and security services 1,564 1,326 1,193 Amortization of intangible assets 921 117 163 Other expenses 1,472 1,662 1,637 124,023 106,102 94,676 39,461 42,377 56,138 OTHER INCOME (EXPENSES) Foreign exchange gains (losses) – net 3,282 (735) 1,850 Equity share in net earnings of associates and joint ventures 1,538 2,035 1,408 Interest income 1,354 1,357 1,180 Gains (losses) on derivative financial instruments – net (2,009) 201 (1,741) Financing costs – net (6,876) (6,454) (6,530) Other income 6,003 2,947 1,929 3,292 (649) (1,904) INCOME BEFORE INCOME TAX FROM CONTINUING OPERATIONS 42,753 41,728 54,234 PROVISION FOR INCOME TAX 8,012 10,922 13,490 NET INCOME FROM CONTINUING OPERATIONS 34,741 30,806 40,744 INCOME (LOSS) AFTER TAX FROM DISCONTINUED OPERATIONS 660 831 (485) NET INCOME 35,401 31,637 40,259

ATTRIBUTABLE TO: Equity holders of PLDT 35,454 31,697 40,217 Noncontrolling interests (53) (60) 42 35,401 31,637 40,259

Earnings Per Share Attributable to Common Equity Holders of PLDT Basic 163.86 163.24 212.85 Diluted 163.86 163.10 212.85

Earnings Per Share for Continuing Operations Attributable to Common Equity Holders of PLDT Basic 160.80 158.90 215.45 Diluted 160.80 158.77 215.45

* Certain amounts shown here do not correspond to the 2011 and 2010 consolidated financial statements and reflect adjustments made as detailed in Note 2 – Summary of Significant Accounting Policies – Discontinued Operations. See accompanying Notes to Consolidated Financial Statements.

Page 8 of 9

This press release may contain some statements which constitute “forward-looking statements” that are subject to a number of risks and uncertainties that could affect PLDT’s business and results of operations. Although PLDT believes that expectations reflected in any forward-looking statements are reasonable, it can give no guarantee of future performance, action or events.

For further information, please contact:

Anabelle L. Chua Melissa V. Vergel de Dios Ramon R. Isberto Tel No: 816-8213 Tel No: 816-8024 Tel No: 511-3101 Fax No: 844-9099 Fax No: 810-7138 Fax No: 893-5174

About PLDT

PLDT is the leading telecommunications provider in the Philippines. Through its three principal business groups – fixed line, wireless, and business process outsourcing – PLDT offers a wide range of telecommunications services across the Philippines’ most extensive fiber optic backbone and fixed line, and cellular network.

PLDT is listed on the Philippine Stock Exchange (PSE:TEL) and its American Depositary Shares are listed on the New York Stock Exchange (NYSE:PHI). PLDT has one of the largest market capitalizations among Philippine listed companies.

Further information can be obtained by visiting the web at www.pldt.com.

Page 9 of 9